Toyota plans to add 600 U.S. jobs

West Virginia Secretary of Commerce Ed Gaunch, right, speaks after an announcement of an expansion at Toyota Motor Manufacturing, Thursday, March 14, 2019, in Buffalo, W.Va. Toyota Motor Corp. on Thursday announced it is investing an additional $750 million at five U.S. plants. (Sholten Singer/The Herald-Dispatch via AP)

BUFFALO, W.Va. -- Toyota Motor Corp. on Thursday announced that it is investing an additional $750 million at five U.S. plants that will produce nearly 600 new jobs and include the production of two hybrid vehicles for the first time at its Kentucky facility.

It marks yet another expansion of the Japanese automaker's U.S. presence.

The latest investments are at facilities in Alabama, Kentucky, Missouri, Tennessee and West Virginia. Those same facilities were part of a 2017 announcement by Toyota for a $374 million investment to support production of its first American-made hybrid powertrain.

President Donald Trump congratulated Toyota on Twitter and tried to tie the announcement to his efforts on trade.

Referring to an agreement with Canada and Mexico that would replace the 25-year-old North American Free Trade Agreement, Trump said: "BIG NEWS for U.S. Auto Workers! The USMCA is already fixing the broken NAFTA deal."

The United States-Mexico-Canada Agreement, the moderately revised version of NAFTA negotiated by the Trump administration, has not been approved by Congress.

The president made no mention when a Chevrolet Cruze factory in Ohio recently closed, the first of five North American plants that GM intends to shut down by early next year.

Toyota Motor North America executive Chris Reynolds said the investments represent yet more examples of the company's long-term commitment to build where it sells, irrespective of trade uncertainty related to tariffs.

"Our overarching manufacturing principle is if we can sell it here we need to make it here. That's been true before any tariff uncertainty, it's true during tariff uncertainty and it will be true after. Our investment cycles go beyond any particular political cycle," he said during a conference call with reporters.

Toyota Motor North America Chief Executive Officer Jim Lentz said the driving force behind the overall investment has been consumers' "insatiable appetite" for light trucks over passenger cars, pointing to Highlander and RAV4 production and past pickup production.

Lentz said the decision to further amp up the investment reflects Toyota's credo to build cars where they're sold, as well as increasing U.S. demand for its vehicles. But he also said a new North American trade deal and tariff threats also contributed to the moves.

"But I'd be disingenuous if I didn't say we also have an eye on trade," Lentz said. "USMCA is part of that. But these decisions we're making today are really driven by consumers and our product portfolio going forward, for the most part."

The automaker is spreading the additional investments among several plants.

Toyota's Georgetown, Ky., facility will get a $238 million infusion to produce hybrid versions of Lexus ES 300 sedans starting in May and the RAV4 SUV starting in January 2020, the company announced.

The only hybrids Toyota makes now in the U.S. are gas-electric versions of its Camry and Avalon sedans, and the Highlander sport utility vehicle. Building the RAV4 hybrid in Kentucky reduces trade risk for a key model that's been entirely imported from Canada and Japan.

Toyota isn't ruling out eventually producing a gasoline-only version of the RAV4 in Kentucky if demand for the vehicle continues to grow, Reynolds told reporters. The company already produces the conventional Lexus ES in Kentucky.

The RAV4 production doesn't signal a shift away from sedan production at the sprawling Kentucky plant, Toyota executives said. Instead, it reflects Toyota's plan to build multiple vehicles at its plants to better insulate each facility from downturns in market cycles.

"Unlike some of our competitors, we think there's value in the sedan market, while it may not be as big as it was," Reynolds said.

Lentz said about 10 percent of ES and roughly 12 percent RAV4 sales in the U.S. last year were for the gas-electric versions. "We think there's going to be increased demand, especially for hybrids," he said.

The announcement also includes $288 million to increase annual engine capacity at Toyota's Huntsville, Ala., facility. The plant will add 450 jobs to accommodate new four-cylinder and V6 engine production lines.

Toyota also is spending $62 million on equipment to boost production of Toyota and Lexus cylinder heads at its Bodine Aluminum facility in Troy, Mo., as part of its cost-saving New Global Architecture production strategy to share common parts and components among different vehicles.

A $50 million expansion and equipment upgrade at a Bodine plant in Jackson, Tenn., will add 13 jobs and produce engine blocks while doubling the capacity of hybrid transaxle cases and housings.

And Toyota will add 123 jobs and spend $111 million to expand its plant and purchase equipment in Buffalo, W.Va., to double the capacity of hybrid transaxles.

Previously, Toyota also announced a $600 million investment at its Princeton, Ind., plant to increase the capacity of its Highlander SUV and to incorporate the new production strategy, and $170 million to launch the 2020 Corolla on a new production line in Blue Springs, Miss.

Information for this article was contributed by John Raby and Bruce Schreiner of The Associated Press; and by Chester Dawson of Bloomberg News.